Signaling and Higher Education: Email With Bryan Caplan

Having looked at your slides, I would say we pretty much agree. I think employers have little control over the content of college education and, as you say, use quality of college because it works better than IQ tests and the like — as you say.

Perhaps we also agree that just as British aristocrats have a lot less power now than they did 200 years ago — the message of Downton Abbey — so are American college professors slowly losing power. MOOCs are one example, blogs are another. Parents and professors are quite happy with the current system, students and employers are not, and they are gaining power. That is my theory, anyway.

I think a signaling explanation does a very good job of explaining why sense of humor matters so much, especially in mate choice. Sense of humor = Nature’s IQ test. Sense of humor signals problem solving ability, which really matters but is hard to measure directly. I used to think that we have two basic tasks in life, manipulating things and manipulating other people (long ago nobody was depressed, etc.) and they were really different.

One surprising result of this phenomenon is that major businesses seem to invest comparatively little in higher education. It would not be difficult for Microsoft or Apple to start a college dedicated to teaching the skills that their pipeline demands. However, outside of some relatively small gifts to engineering, business and comp sci departments, they seem mostly content with outsourcing under the current model.

Microsoft or Apple could start colleges but 1) students can’t be sure they won’t get fired or want to take a job elsewhere so they will want a curriculum which is fairly general, 2) Anglo-American law prohibits Apple or Microsoft from making an enforceable agreement: we will pay for you to attend and you agree to work for us for 7 years.